The nuclear black market: extent and countermeasures

Key points
• Despite the arrest of Pakistani scientist Abdul Qadeer Khan, his legacy lives on and a network of illegally transported nuclear expertise and materials still flourishes.
• A series of initiatives have been set up to help counter this problem and nations that were formally involved in proliferation have taken steps to rein in exporters of nuclear technology.
• The extent of the knowledge needed to develop a nuclear weapon, along with the efforts to stem proliferation mean that terrorist groups are more likely to try and acquire biological, chemical weapons or conventional explosives.

Following Pakistani scientist Abdul Qadeer Khan's confession in 2004 to running a nuclear black market that supplied nuclear expertise, technology and weapons designs to at least three countries for two decades, evidence persists that the network is still in operation.

In January, a 55-page assessment by an unnamed European intelligence agency, based on material gathered by British, French, German and Belgian agencies and used to brief European government ministers, stated that remnants of Khan's network are still actively involved in the illegal transfer of technology and that networks even more extensive than Khan's currently exist.

Khan's network

The extent of the Khan network's activities revealed how certain nations covertly acquired a vast range of goods to set up their nuclear, biological and chemical (NBC) weapons programmes. The full extent of Khan's network and the goods trafficked has yet to be established, although the International Atomic Energy Agency (IAEA) and the CIA have uncovered a degree of proliferation of nuclear technology and expertise to aspiring nuclear states. Evidence of the network's activities emerged from investigations into Libyan nuclear activities following Colonel Moammar Ghadaffi's announcement that his country was forgoing the development of weapons of mass destruction.

Ongoing IAEA investigations into Iranian undisclosed activities also revealed supply of centrifuges and other components and enrichment technology. This uncovered the true aspirations of this and other countries to become nuclear weapons states. It also indicated the extent to which Khan's transcontinental network of companies, middlemen, scientists and officials helped these countries on the road to achieving this aim. North Korea, which could already have a small arsenal of nuclear warheads, was also a beneficiary of uranium enrichment technology and possibly weapon designs, in return for supplying missile technology to Pakistan.

Lax export controls, use of front companies, shipments made on false certificates and the failure of intelligence agencies to track down the traffic have enabled the network to persist. Because thousands of items traded are dual-use - having civilian nuclear energy as well as military purposes - companies and traders can disguise their intended function. As they are shipped via a maze of contacts and via several countries, it is difficult to trace their origin, progress and final end-user destination. Companies may have helped Libya, Iran and North Korea construct gas centrifuges for enriching uranium without knowing the true purpose of the goods they were supplying.

Other scientists aligned to the Taliban and other radical Islamic movements may have been, and may still be, involved. The trade depended on middlemen based in Europe and the Middle East who helped to procure equipment diagrams and warhead designs. These individuals either acted alone or on behalf of companies to forward shipments of materials, with Khan controlling the operations.

Continuing the proliferation networks

The European intelligence report claims that, since early 2004, the Pakistani nuclear sector has registered efforts at procuring materials and components for the nuclear programme, which exceed basic requirements for spare parts and replacements.

The Pakistani government claims it has broken up the network. Under pressure from the US, it also supplied information leading to the arrest of various network operatives in Europe and elsewhere. However, the EU intelligence report reveals that middlemen, front companies, academics and bureaucrats working for the governments of Iran, Syria and Pakistan have approached high-technology engineering companies, scientific institutes and universities in western European countries to obtain materials for their NBC, missile and conventional weapons efforts. They are also cited as targeting Russia and former Soviet Union countries for scientific expertise, particularly scientists formerly employed in former Soviet NBC centres.

While there is as yet no evidence that terrorist groups, most notably Al-Qaeda, have benefited from the nuclear black market, there were attempts in the 1990s to acquire expertise and materials, and the EU report claims criminal networks are increasingly involved in nuclear trafficking to specific customers, including terrorist groups.

The European intelligence services discovered more than 200 Iranian companies, institutes and government offices engaged in weapons research, development and procurement. Iran's military programme is said to benefit from 16 Russian companies and academic institutes, as well as middlemen in Azerbaijan and Armenia.

Arms exports are North Korea's most important source of income, mainly to Egypt, Iran, Pakistan and Syria. It has maintained an extensive network of front companies since the 1970s. More than 30 Chinese companies and institutions, mostly state-owned entities, have been involved in North Korean arms procurement.

Countermeasures

Efforts to stem the worldwide nuclear trade focus on intelligence to track companies and criminal networks. This is the most difficult countermeasure to implement, as a great degree of international co-operation between national police and intelligence services is needed to track the shadowy network of front companies. The US regularly applies sanctions to Chinese, North Korean and Iranian companies and entities for alleged trading in nuclear-related goods, and goods related to chemical and biological programmes - which are more commonly available and dual-use - but this does not necessarily deter others.

Many countries have applied stricter national controls to exports of sensitive items and the trading activities of their companies and institutes. In May 2003, the US also set up specific initiatives, most notably the Proliferation Security Initiative (PSI), as an informal arrangement to interdict land, sea and air shipments of NBC weapons and related items. Now involving 16 countries, the PSI's first major success was the interdiction in October 2003 of a shipment of uranium centrifuge components bound for Libya from Malaysia. This event exposed the existence of Khan's network.

By mid-2005, the PSI had made 11 interdictions, although it is difficult to ascertain whether these can be attributed to its success or an upsurge in proliferation activity. The US is reportedly consulting with 24 other countries to establish ship-boarding agreements, and interdiction exercises are conducted regularly.

The PSI does not grant governments any new legal authority to conduct interdictions in international waters or airspace. There is also no list of criteria for interdictions, other than if cargo is destined for a recipient that could use it against the security of the US or other countries. Despite this, it is endorsed fully by the EU and the G8 nations.

A key gap in the PSI framework is that it applies only to commercial transportation. Government ships, aircraft and trucks cannot legally be interdicted. Consequently, missile shipments being loaded onto a Pakistani C-130 cargo aircraft in summer 2002 in North Korea, detected through satellite surveillance, could not be intercepted under the PSI (although Pakistan claimed the aircraft was only picking up shoulder-fired anti-aircraft missiles).

Although a further 60 countries have agreed to co-operate, China has not joined the PSI, citing concerns about the legality of interdictions. But it has joined the 44-nation Nuclear Suppliers Group - a multilateral export control regime set up following the explosion of a nuclear device by India in 1974, which demonstrated how nuclear technology could be adapted for military purposes. NSG member states restrict the transfer of sensitive nuclear items and technologies according to specific guidelines.

Member states that are potential recipients of sensitive goods are expected to have physical security measures in place to prevent theft or unauthorised use of these imports. They must also ensure that nuclear materials and information will not be transferred to a third party without the explicit permission of the original exporter. Members are expected to circulate names of companies to which they have denied exports to prevent representatives from proliferant governments and other officials from approaching them, as the same request for items are often made to several suppliers.

Such international voluntary agreements have varying degrees of effectiveness in countering the nuclear black market, mainly because the increase in global free trade makes it almost impossible to stop or hamper the flow of all types of goods. While these and other countermeasures, such as end-use control, can perhaps reduce the speed and quantity of goods trafficked, the nuclear aims of potential recipients are more likely to be limited or stemmed by the sheer scale, complexity and expense of such programmes than by such measures. Terrorist groups, who are more likely to depend on criminal networks and sympathisers for equipment and expertise, are also likely to want cheaper, more readily available options - chemical and biological agents and conventional explosives - and the means to manufacture them to weapons-grade quality.

Andy Oppenheimer is a consultant in nuclear, biological and chemical weapons for Jane's Information Group.